Get out of Debt Fast!

Are you looking to pay off that Debt Fast? then 2023 is the year for you.

We all think or say out loud something like “I am tired of the making these debt payments every month again and again” or “I wish I could spend that money somewhere else”. Many times we all feel like getting rid of the debts. I started thinking like that some time back and if you want all the debt to be gone then I have something for you.

First of all, it’s amazing that you are thinking about your clearing your debt and you should give a pat on your back for thinking that. You are at the right place right now. Many people have a goal to get their finances in order and for others it’s about clearing the debts and becoming debt free fast.

I have explored many options and started using few, and in this blog I have shared few of the top ideas I really like and are feasible for almost everyone. 

We need to understand that our Debts are huge because it’s easy to get into debt. There is a saying – “you can wander you way into the debt but you cannot wander out of the debt”.

So when think of buy that house or that car or anything expensive, you just think “Okay, I will have to sign that paper to get that money”. It doesn’t take a lot of efforts to sign & it seems like easy money. And that can be a beginning of going into a “Black Hole” of debt and payments and the worse is that all the media and propaganda around us makes us believe that is the way of life. Take loan and repay for rest of your life and it gets to a point when some people start thinking-

“I don’t think I can get out of debt”

“This is a way of life now”

“I don’t think how to get out of this cycle and stop it”

“I don’t believe I can do it because of my existing income” and so on

You need to shift your mindset from I CANNOT to I CAN, and once you have that belief only then you can get out of this mindset. It’s like we see a lion chasing a deer, a deer gives its all in. Like running to save it’s life. That’s the intensity you need if you want to get out of the debt. It cannot be a casual thought like “okay, I want to get out of the debt, Ya, it will be fun getting out of debt. May be I will do something tomorrow, try to get some money from here and there yada yada yada….”. No, don’t be casual; you need that intensity of a deer running for its life. If you have gotten yourself into that big debt then act like a Deer to because the debt is like a Lion trying to hunt you down. 

Start saying – “Okay, I am going to do this every day, to lower my debt”. Get ready to sacrifice and go all in. Make goals, track the progress on those goals every day, start budgeting every day, track yourself, look at your transactions/ payment/ purchases every single day, how much you had in the beginning of the day, how much you are left at the end of the day and so on. Just look at yourself, see what you are doing, identify what you are doing wrong and budget every day.

This change in mindset can help you get out of the debt fast, not like taking forever to clear that debt. A shift in your mindset can start showing results very fast.

Snowball effect

When we think about clearing our debts we start thinking about getting rid of the highest interest rate debt first and moving down to then the lower rates. But that’s how everyone would like to do, like its simple math. However, clearing debts and money matters are something beyond simple math and getting out of debts is not always about usual math.

I was reading about this SNOWBALL effect few weeks back and I decided to share it with you all here. So, it’s like how minor actions can result in bigger actions and eventually result in a big impact. You have to focus on smaller debts first to make you fell quick wins.

In the Snowball way focus on looking at the smallest debt versus the largest debt. Make a list of all your debts and arrange them from smallest to largest debt. Now focus on the smallest debt, like paying the Costco Mastercard for say $300. Put your efforts towards paying the smallest credit card debt, resulting in only having the minimum payment left.

This freed up money can be redirected towards paying off the next smallest debt. Repeat the process until all debts are cleared eventually. It is like creating a SNOWALL mathematically and keep freeing your money to go towards your next debt or I should say next smallest debt. By doing this not only get will start getting small wins but you can now check off or cross out the debts from the list you prepared initially. This allows you to see your progress and that progress allows you to clear your debt faster.

Budget

I know I have mentioned budgeting many times in some articles too, but may be because I want to stress on it again and again. So, the next thing you should do is to get on a budget. Make a plan on a paper; on excel sheet, on your phone, and wherever you want to do please make a budget. Our primary expense goes towards Four important things – Food, Shelter, Utilities and Transport. And everything other than these four are your wants. Keep an emergency fund too, call it Contingency fund or medical emergency fund. 

When you are under a heavy debt think about where you can cut something say on Entertainment subscriptions, extra clothes, some purchases that can wait and so on. I will share link to my budgeting article again. Idea is to figure out where I can control my expenses so that that extra money can go towards paying off the debts faster. Keep thinking about attacking the list of debts you made that should be the result of budgeting

Sell that extra stuff

Yes that the next thing you can do to pay off your debts faster. We all know if we look around our home carefully we can see stuff that we don’t use. Try to sell it and sell it fast, get rid of that extra stuff that you haven’t used for a long time and you know you will not use it in future. Put it on market place or so many website. Get cash instead and use that to pay off the debts, don’t worry even if something is worth $50, just get that $50 and channel it towards paying of your debt. Whether it’s something small or something big if you don’t use it, it needs to go and brings in cash for you. Look for stuff you can live without. Image this when your debt will be clear you can then think about like a piece of electronics you sold earlier you may now think about buying it. Trust me once you start decluttering your home by selling stuff, it will give you give you mental peace and on top of that you are making money too and clear that debt faster, its win-win situation!

Side Hustle

Yes we all love some extra money coming into our pockets our wallets and if w can find something that we can do in our spare time then why not. And that extra money can go towards paying off that debt. I have written about it earlier too, but trust me everyone one can do it, I have seen so many people doing and I am doing. If clearing debt is your goal, you make a small plan say you want to do a side hustle for a short amount of time say from January to June.

Do stuff that encourages you. Whether it’s food delivery, driving for Uber, lawn mowing, baby sitting, freelancing, renting your car, walk dogs, clean homes, trash picking, bartend, pet sitting, and so on. Focus on for how long you want to do it, and how much you aim at earning. If you doing a side hustle to clear the debt don’t lose the focus, whether it’s going to be for a long time or a short time. Try to encourage yourself to do it and aim at that kicking off that debt.

Learn more about Feasible Side Hustles and also consider learning about “Basics of Investment“.

 

I Hope I was able to add some value to your life! Thanks for reading!!!